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Maam, if as an auditor we see such a fraud, can't we do external confirmation..why should we withdraw from the engagement? [Video Time Stamp: 05:36] Video Details ------------- Standards on Auditing - CA Final SA 240 - Auditor's Responsibility towards Fraud #16. Questions - 3
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External confirmation is basically confirming existence of matters . In audit, it has some limitation that we need to get data available from the management, route through them etc. so it can’t be considered as reliable. external confirmations alone may not resolve the issue, particularly when: -The suspected fraud originates at a senior level (like CEO/CFO), -There’s collusion or override of controls, -The integrity of the management is in question, In such situation, withdrawal become mandatory.
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